USD Index (DXY) Stays Above 90.00 After the Largest US CPI Increase in 13 Years

The US Dollar Index (DXY) maintained its bullish recovery position after the US Dollar got some significant push from the US Consumer Price Index report released a few minutes ago.

According to the report released by the Bureau of Labor Statistics, US Consumer Price Index (headline) increased 0.8% on a seasonally adjusted basis, which was more than the 0.6% increase seen in March and better than the market expectation of 0.2%. This translated to the largest 12-month increase in 13 years, rising by 4.2% pre-seasonal adjustment on an annualized basis. 

The core CPI figure came in at 0.9%, beating the market consensus of 0.3% and bettering the 0.3% increase seen in March. This was also a multi-year high, being the most considerable rise seen in 39 years.

The biggest increase in the index for used cars and trucks since 1953, which came in at 10.0%, was primarily responsible for the massive jump in consumer inflation. The food index rose 0.4%.

The DXY is currently trading at 90.562, notching up gains of 0.45% on the day as of the time of writing. 

Technical Outlook for DXY

The active daily candle is challenging the resistance at 90.503. If this resistance level is uncapped, the pathway towards 90.965 becomes clearer. Above this initial target, additional upside barriers exist at 91.261 and 91.500. The latter is where the channel’s lower border will form an additional resistance barrier. The ability of the DXY to cross this barrier will dictate if 92.00 and 92.50 will come into the picture as additional price targets to the upside.

Conversely, a breakdown of the 90.228 support, coming off the back of rejection and pullback at 90.503, allows the bears to make a push for 89.741. Below this level, additional support comes at 89.189, which is where the 6 January low is found. The downside move may also come off rally-selling at the resistance areas mentioned above.

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USD Index (DXY) Daily Chart

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